Failing to plan is planning to fail
As the old adage goes: failing to plan is planning to fail. For growing businesses with their sights set on global market expansion, this couldn’t be more applicable. Cracking into international markets starts way before you touch down on foreign soil, in the planning phase, with the development of a winning international expansion strategy geared toward minimizing risk and maximizing your chances of success.
Here are some best practice tips to help you build an international expansion strategy that works that will provide your Internationally expanding business the competitive advantage in the new market.
Define and refine your goals
Before you get to work on the “how”, it’s essential to define the “why”.
Your global expansion strategy must be shaped around a clear set of business goals that will help guide your decision-making, and ensure the most appropriate allocation of the resources you have at your disposal. What is the victory condition when it comes to global expansion? What do you want to achieve, and by when? The goals you set should be specific, measurable, achievable, relevant and set to a clear timeline. Once your business objectives are clearly defined, you can work backward to determine the most efficient route to achieving them.
Do your research
Any expansion strategy needs to be underpinned by exceptionally granular market research to identify all opportunities, barriers to entry and potential stumbling blocks. Some questions which need to be answered include:
- What is the demand for my product or service?
- Will I need to invest in localization before I bring my product or service to market in the target country?
- Are local laws and regulations prohibitive? If so, how do I navigate them safely?
- Who would be my local competitors in the new markets?
- Am I able to differentiate my product or service within the existing competitor landscape?
- What will my cost structure look like in the new economic context?
- What are the relevant consumer trends in the current target market?
- Who is my new customer within the target market?
- What are the average income levels in the target markets country?
- How quickly will I be able to get up and running?
- Do I have enough capital to fund set-up, considering potential roadblocks and delays?
Find the right global mobility solution
Once you’ve determined your target market country, you’ll need to develop a global mobility framework in order to hire new employees abroad or relocate your existing employees. Navigating payroll, tax and labor law, and other important compliance issues in a foreign market can be complex, costly, and resource-intensive. Developing the right market entry strategy for your business will help you mitigate risk, stay compliant. Many businesses handle this part of the global expansion process by using an Employer of Record service, such as Playroll. An Employer or Record acts as the de jure employer of each new hire, taking full legal liability for them, and allowing companies to avoid having to set up their own local entities – a costly and time-consuming process. They also provide other important services that increase employee success, like visa support services, local legal counsel services, and payroll management.
Using an Employer of Record service also allows you to hire exactly the right people, no matter where they are in the world, granting you access to domestic market and expertise, as well as a bottomless international talent pool. This can be particularly advantageous in expanding your market share, as you can tap into diverse pools of skilled professionals across different regions and in multiple countries. By leveraging this global talent pool, you will enhance your competitive advantage and increase your market share in the new market.
Agility is key
Expanding your operations in a new country requires an agile, responsive, and flexible approach. Many of the pitfalls that derail global expansion efforts aren’t immediately apparent until the process is well and truly underway, and no amount of planning can prepare you for every eventuality. Make sure that your expansion strategy delivers a good amount of flexibility and sufficient capital reserves to facilitate a pivot if and when required.
What are the benefits of globally expanding your business?
Expanding your business globally could offer a multitude of benefits and growth opportunities. Here are some key advantages that come with global business expansion provided done correctly:
- Access to new markets: Global expansion allows you to tap into new markets and reach a larger customer base. By diversifying your customer portfolio, you can reduce reliance on a single market and mitigate risks associated with economic fluctuations or localized challenges.
- Increased revenue and growth potential: Entering new markets opens up avenues for revenue growth. By expanding your customer reach, you can capitalize on untapped market demand and potentially increase sales and profits.
- Competitive advantage: Global expansion enables you to gain a competitive edge by differentiating your products or services in new markets. You can leverage your unique strengths, capabilities, or innovations to position your business as a leader in the global arena.
- Economies of scale: Expanding globally often leads to economies of scale, as increased production volumes and market presence can lower costs per unit. This cost advantage can enhance your profitability and competitiveness in both local and international markets.
- Access to talent and resources: Global expansion allows you to access a diverse pool of talent and resources. By hiring locally in new markets, you can leverage local expertise, knowledge, and cultural insights. Additionally, you can tap into global supply chains and sourcing options, benefiting from cost efficiencies and specialized resources.
- Learning and innovation: Expanding globally exposes your business to new ideas, perspectives, and ways of doing business. It encourages innovation and fosters a learning culture within your organization. Embracing different market dynamics and consumer preferences can drive creativity and help you stay ahead of industry trends.
- Risk diversification: Operating in multiple markets can help spread risks. If one market faces challenges or economic downturns, your business can rely on revenue streams from other markets to maintain stability and sustainability.
- Enhancing brand reputation: Global expansion can enhance your brand’s reputation and credibility. Establishing a presence in new markets can improve brand recognition, build trust, and create a positive brand image globally.
However, it’s important to note that global business expansion also comes with challenges and risks, such as cultural differences, regulatory complexities, logistical hurdles, and increased competition. A well-thought-out strategy, thorough market research, and careful planning are crucial to maximizing the benefits while mitigating potential challenges during the expansion process.
Make the world your playground with Playroll
Global expansion delivers a host of opportunities for growing businesses, including access to new global markets and customers, the risk mitigation that results from greater diversification, and access to exciting new potential streams of revenue in new foreign markets. But the success of any global business expansion hinges on a strong expansion strategy, as well as the right compliance and global mobility solutions to get your business up and running on foreign soil as quickly as possible.
To help you hit the ground running, choose an Employer of Record service like Playroll. Playroll’s established network of international subsidiaries allows you to hire in over 180 countries right away, without the delays and legal and compliance wrangling involved when having to set up your own local entities. With Playroll, everything from global payroll management to in-country legal counsel, visa support services and beyond is handled, freeing you up to focus on what matters: executing an global expansion strategy that wins.
Get in touch with our team today to set up a quick free demo, and see how Playroll can 10X your chances of global expansion success.